Thursday, June 27, 2013

Take The Time To Update Your Will

No group has been the subject of more jokes than lawyers. Perhaps this stems from the fact that most of our contact with the law is in regard to something negative (i.e., a divorce, a will contest, a criminal charge, a mortgage foreclosure). Those unfortunate situations may taint your impression of attorneys. As a lawyer, I decided that I could go around being upset at the lawyer stereotypes portrayed in these jokes or roll with the punches and have a good laugh along with everyone else.
Thus, I'm including some of my favorite lawyer jokes/stories as part of my monthly newsletters in an attempt to show that I do not take myself too seriously, have a sense of humor and am a real person who just happens to be an attorney. I hope you will enjoy these inserts in our newsletters each month and that they will add some levity to the more serious and important information contained therein.
Best regards! Mark D. Klein
A woman and her little girl were visiting the grave of the little girl's grandmother. On their way through the cemetery going back to the car, the little girl asked, "Mommy, do they ever bury two people in the same grave?"
"Of course not, dear," replied the mother. "Why would you think that?"
"Because the tombstone back there said, 'Here lies a lawyer and an honest man.' "
By some accounts, 70% of adult Americans do not have a will. If you have at least gone to the trouble of making a will, consider yourself
ahead of the curve and pat yourself on the back. Then come back to earth and understand that your work is not completely done. A will is not a static instrument. To serve its purposes, it must keep current with life changes, including an individual's financial circumstances, and with some external factors, such as tax laws. With the help of a professional, you should periodically review your will, staying alert to new or different circumstances that might call for updates.
Obviously, a marriage usually brings a new beneficiary into the picture, and a divorce may remove one. Some of the changes in a will prompted by a change in marital status may not be so apparent. For example, when a widow or widower remarries, the will may need to be updated to show how children from the previous marriage and the new spouse are to be provided for.
A new child is a new beneficiary, but a will can and should cover more than just the distribution of property to heirs. Parents can name a guardian, and even an alternate guardian, to care for their children in the event that something happens to both parents. Absent such a provision in a will, a court will appoint a guardian.
The death of an executor, guardian, beneficiary, or trustee creates a gap in how the will is supposed to operate. Fill in the gaps by making necessary changes, such as naming a new individual or, in the case of a deceased beneficiary, simply removing him or her from the will.
If you enjoy an unexpected windfall, you may still want the larger pie divided up as before. But it is likely that some changes in your will are called for. If the increase in the potential estate is large enough, it might trigger the need for planning to avoid or minimize estate taxes. A reversal of fortune could also suggest some changes. For example, you may have to revise downward that fixed sum you were planning to leave to a favorite charity.
You will not have to start from scratch if you move to another state, because all of the states recognize a will that was properly created in another state. Nonetheless, legal advice should be sought in the new state because changes in the law from state to state could require some tinkering with the will. There may be more than tinkering involved if you move to or from a community property state.
The government's intentions can change even if your intentions have not. Some of the changes benefit individuals with wills, but you can take full advantage of them only if you are aware of them. The big item here is changes to the federal estate tax exemption, which is the amount an estate can reach before it is subject to a (hefty) estate tax. In recent years the exemption has headed up, but there are no guarantees about what Congress will do with the exemption going forward.
If you decide you want to change beneficiaries, a guardian, an executor, or anything else in a will, you can do so. For example, you want to make sure that the beneficiaries in your will are the same as the beneficiaries you have named in your insurance policies and retirement accounts. Otherwise, the beneficiaries actually named in those documents, not the beneficiaries under the will, will get the money from the policies and accounts. Bear in mind that no amount of talking about your new intentions will make them happen. The changes must be indicated in a properly executed will.
You should keep the finished (at least until the next update) product in a safe place. When "they" say "keep this with your important papers," think of your will. Your family should know where to find the executed will. An unsigned copy of your will in its latest form is a good starting point for the next periodic review.
Even the best drafted will is not likely to cover everything needed for a smooth disposition of your estate. To supplement the will, consider executing a letter of instruction. It generally is not legally binding, but it can go a long way to expedite the process and provide information not to be found in the will.
Some items appropriate for a letter of instruction include a list of bank, brokerage, and mutual fund accounts; directions on where to find important documents or personal property; user names, PIN numbers, and passwords necessary for access to electronic records; and contact information for legal and financial advisors. Be sure to list any life
insurance policies, as beneficiaries will collect on those policies outside of the will. Any advance plans for the funeral and burial also should be mentioned in the letter of instruction.
Mark D. Klein, Esq. is a senior attorney at Klein Law Corporation, a Southern California-based law firm providing legal assistance to businesses and individuals alike. Klein Law Corporation provides an extensive range of legal services aimed at helping clients with issues involving corporate law, business law, intellectual property matters and estate planning while actively working with entrepreneurs starting business ventures and those purchasing or selling businesses.
The foregoing information is presented by Klein Law Corporation as a news reporting service to clients and friends of the firm and is distributed with the understanding that Klein Law Corporation is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at

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